Deck 16: Customs Clearance

Question 1

The Brussels Definition of Value has been replaced by what is called "arbitrary" value.

Answer 1

False

Question 2

A substantial tax break to companies that use imported parts as components of the products they export is called a duty drawback.

Answer 2

True

Question 3

In most countries,only certified Customs brokers or Customs agents are allowed to file the paperwork necessary to clear Customs.

Answer 3

True

Question 4

A medical device is not legal in country A,but is legal in country B.Despite being restricted from country A,the product is allowed to go through the foreign trade zone of country A on its way to country B.

Question 5

The deductive method of valuation is when Customs determines at what price identical or similar goods are sold within 90 days of importation in the importing country,and determines an entry value based upon "normal" mark-ups in the distribution channel.

Question 6

Countries' efforts to make imports adhere to national standards are not considered to be trade barriers.

Question 7

An importing country usually manages its imports under a tariff system that is called an "N-country tariff system."

Question 8

For textile goods imported in the United States,the country of origin is the country in which the last change in Harmonized System classification occurred.

Question 9

Pre-shipment inspections are inspections performed by independent companies at the point of departure of goods destined to be exported.

Question 10

Goods in a foreign trade zone can be warehoused until they are sent to their final destination,either in the host country or to a foreign destination.If the goods are sold in the host country,they are only dutiable at the time of that transaction.If they are sold abroad,they are dutiable both to the country where they are sold and to the host country of the foreign trade zone.

Question 11

National standards on imports are always thinly-disguised non-tariff barriers to trade.

Question 12

In the United States,the Customs Service will refund 75 percent of the duty paid by an importer for,among other things,merchandise that is rejected by the importer as non-conforming to the original purchase order.

Question 13

The concept of a value-added tax is simple and easy to administer.

Question 14

Since the World Trade Organization has pressured importing countries to reduce tariffs,importing countries have done away with non-tariff barriers.

Question 15

Customs offices sometimes can use a "countervailing" duty to tax products that the exporting government is found to have subsidized.

Question 16

The Harmonized System of classification is used to classify both exports and imports.

Question 17

The last four digits of the numbers in the Harmonized System of classification are country-specific.

Question 18

The determinations by Customs officials of product values are sometimes arbitrary.

Question 19

Sometimes the "made in [country]" marking on the product is different from the country of origin for Customs duty purposes.

Question 20

Most countries welcome imports.

Question 21

Most duty is collected ad valorem which means

A) it is based on the value of the import.
B) it is based on the value that is added in each process of manufacturer/improvement.
C) the duty adds value to the product.
D) the duty reduces the price of the product.
E) None of the above

Question 22

The United States requests the "sewing tickets" for some garments,an internal work document of the garment factory,as well as the time cards of the employees working there in an attempt to determine the country of origin of textile products.This can be an example of a non-tariff barrier.

Question 23

In most countries,the general process of clearing Customs begins with

A) a declaration of "liquidation."
B) the filing of an "entry."
C) a declaration that the goods are "cleared."
D) a review of grounds for a protest.
E) None of the above

Question 24

Duty is usually based upon

A) tariff, border traffic taxes, and non-tariff barriers.
B) value-added taxation, absolute quota, and patriotism campaigns.
C) pre-shipment inspections and Customs bonds.
D) product classification, valuation, and origin.
E) None of the above

Question 25

Non-tariff barriers may appear in the form of

A) requiring a special sticker to be applied to an imported product.
B) slowing down Customs clearance processes.
C) multiplying the number of documents required for importing products.
D) All of the above
E) None of the above

Question 26

A value-added tax is eventually only paid by

A) producers.
B) importers.
C) consumers.
D) manufacturers.
E) None of the above

Question 27

Pre-shipment inspections are used when the importer is purchasing on a "cash-in-advance" or on a letter of credit basis.

Question 28

Required documentation for entry into essentially all countries includes

A) a form designated for entry, a Certificate of Origin, and a commercial invoice.
B) a bill of lading, EDI documentation, and a value-added tax certificate.
C) a packing list, health certification, and corporate identification.
D) All of the above
E) None of the above

Question 29

Tariffs can be calculated

A) ad valorem.
B) as a fixed amount per unit imported.
C) in a mixed system of a fixed amount per unit imported plus a percentage of the value of the goods imported.
D) All of the above
E) None of the above

Question 30

Because of the complexity and time-consuming nature of filling out Customs entries,many countries demand that importers delegate the task of interacting with Customs to a freight forwarder,a representative of the importer that has acquired the knowledge and experience required to deal effectively and efficiently with Customs.

Question 31

Argentina,after being chastised by the World Trade Organization for having increased its duty rate on footwear,reduced them,and immediately reimposed them through a _____ tax designed to protect its footwear industry against foreign competition.

A) punitive
B) border traffic
C) temporary protection
D) safeguard
E) None of the above

Question 32

A two-tiered tariff rate on a specific category of products in which the tariff that is low until a quota is reached and then it goes much higher is called a(n)

A) indirect quota.
B) tariff-rate quota.
C) limited quota.
D) designated quota.
E) None of the above

Question 33

For countries in the World Trade Organization,the valuation of goods for import purposes is based upon

A) value added.
B) the invoice value minus packaging costs and transportation costs in the exporting country.
C) the transaction value of the sale.
D) All of the above
E) None of the above

Question 34

A tariff-rate quota

A) places a two-tiered tariff rate on a specific category of products.
B) keeps the tariff low until the quota is reached.
C) raises the tariff after the quota is reached.
D) All of the above
E) None of the above

Question 35

Countries may require pre-shipment inspections because

A) the country wants an expert opinion on the classification and the value of the products about to enter its territory.
B) it increases the tariff valuation of the product.
C) it speeds the Customs process.
D) All of the above
E) None of the above

Question 36

In order for an importer to be found compliant under the concept of informed compliance,it must demonstrate that it has exercised reasonable care in the filing of its Customs entries.

Question 37

Customs brokers are usually compensated on

A) a percentage of the tariff.
B) a percentage of the added value of the goods.
C) a schedule set by the United Nations.
D) a schedule set by the World Trade Organization.
E) None of the above

Question 38

Generally speaking,countries with scarce foreign currency resources will attempt to limit the granting of import licenses to companies that have generated export revenues and

A) companies that have been nationalized.
B) companies purchasing goods for which no close domestic substitute is available.
C) multi-national companies.
D) All of the above
E) None of the above

Question 39

In the Harmonized System of classification,an incomplete or unfinished product is classified

A) in several classifications, depending upon the raw materials of the product.
B) in several classifications, depending upon the classifications of the sub-assemblies of the product.
C) in the classification of the closest similar product.
D) under a special classification designated "unfinished product."
E) None of the above

Question 40

If an importer has a good reputation regarding its following of Customs regulations,the likelihood that one of its shipments is going to be inspected is minimal,therefore minimizing delays at entry and allowing the importer to organize its supply chain more predictably.This is an application of the concept of

A) bonding.
B) stare decisis.
C) Electronic Data Interchange.
D) Customs expediting.
E) None of the above

Question 41

The country of origin of a product is the country in which it acquired its most substantial ____________________.

Question 42

A ____________________ is a guarantee that the importer or their representative will pay the duty due.

Question 43

In order for an importer to come under the scope of informed compliance,it must show that it

A) has exercised reasonable care in the filing of its Customs entries.
B) pays duties up to three months in advance.
C) has not hired a Customs specialist
D) All of the above
E) None of the above

Question 44

Customs determines tariffs based upon the type of goods imported,which is determined according to a number of rules of ____________________ that essentially have been standardized worldwide.

Question 45

When the invoice's value is much below what Customs has historically accepted and when a much higher valuation is reached with one of the alternative valuation methods,Customs can determine that the exporter is ____________________ the goods in the importing country.

Question 46

Documentation designed to indicate what country a product initially came from is contained in the

A) commercial invoice.
B) Certificate of Origin.
C) surety bond.
D) entry form.
E) None of the above

Question 47

The tax an importer must pay in order to be allowed to let goods into the country is called ____________________.

Question 48

An "assist"

A) is an item the importer provided to the exporter to produce the good (such as a mold or die used in manufacturing the product).
B) is illegal.
C) changes the invoice value of the imported goods.
D) All of the above
E) None of the above

Question 49

A country grants or sells a right to export a set quantity of a specific good to an exporting firm.This authorization is called a ____________________.

Question 50

A time-sensitive shipment like an express package can be expedited through Customs by

A) a liquidation statement.
B) a protest.
C) a surety bond.
D) a Certificate of Origin.
E) None of the above

Question 51

In order for a product to be labeled as "made in the USA," its minimal United States content must be ____________________ percent of the product's value.

Question 52

A quota that applies to all imports under an HS heading,regardless of country of origin,is called a(n)____________________ quota.

Question 53

According to the Harmonized System of classification,each product in international trade can have a code that uses up to ____________________ digits.

Question 54

A representative of the importer that has acquired the knowledge and experience required to deal effectively and efficiently with Customs is called a(n)____________________.

Question 55

A quota that places a yearly limit on the number of items entering a country under a specific HS number is called a(n)____________________ quota.